Category Archives: Red Line

This one is going to cost us way more than Charlie’s proverbial nickel. The Baltimore Sun reports:

The Maryland Transit Administration failed to verify the accuracy of millions of dollars in contractor-submitted architectural and engineering costs for the Red and Purple light rail lines, according to a state audit released Monday.

The unverified labor bills from four contractor groups hired to work on the two pending transit lines, scheduled for Baltimore and the Washington suburbs, respectively, account for or relate to $232.8 million in overall costs under the multibillion-dollar projects, the audit found.

And we ought to be concerned that the accuracy of expenditures were not verified because:

The joint ventures were originally awarded contracts not to exceed $280 million, but the value of those contracts was increased in July 2013 to $547.1 million, the audit found.

The lack of checks on expenditures has led to waste such as:

• $10 million in overpayments to Mobility Paratransit Program vendors for fuel.

• Nearly $500,000 in payments of excise tax on fuel that the agency is exempt from paying.

Failing Disabled Marylanders

The audit further legitimated claims by disability rights advocates that MTA is failing them::

The audit also found the agency failed to properly oversee eligibility for its mobility program, something advocates for people with disabilities also alleged in a lawsuit recently filed against the agency.

MTA does not contest the audit’s results.

Accountability

Who in MTA is responsible? Will anyone be held accountable for this two-fold scandal–not just waste of public funds but failure even to keep track of how they are being spent?

At the request of Montgomery County Executive Ike Leggett, the County’s legislative delegation has filed a bill (MC 24-15) to allow the County to create a new, independent Transit Authority. The bill is already generating controversy and an online petition against it on change.org (or, in this case, don’t change.org).

If passed, the bill would permit (read again: permit, not require) Montgomery County to create a Transit Authority. The new authority could potentially run anything from the current Ride-On system to a new BRT (bus-rapid transit) system to parking lots and roads around the County.

The County Executive would appoint the members of the Transit Authority board subject to confirmation by the County Council. This independent body would then carry out independently a transit program as passed by the Council. This program could be relatively narrow (e.g. take over the existing Ride-On system) or broader (e.g. construct and operate a new BRT system).

Taxes and Finances

As written, the bill would allow (again: allow, not mandate) the County to pass a property tax that is designated to raise funds specifically for the Transit Authority. These monies would not count toward the County Charter limit.

Additionally, if transportation expenditures (e.g. Ride-On) are moved over from the County budget, the County could reduce taxes or spend the money on other needs because they would no longer be counted as within the Charter limit.

Less Different Than You Think

The County already has the power to do much of this through special taxing districts that have the power to construct transit (i.e. make capital expenditures) and raise funds outside the Charter limit. However, special taxing districts cannot operate transit.

Though the Transit Authority might spend monies on building and operating new systems, it would also likely realize some savings elsewhere. For example, a new transit line would likely result in needing to spend less on Ride-On buses.

Advantages

The clear advantage of this proposal is that it would allow Montgomery to take greater control its transportation future. Monies raised in Montgomery would stay in Montgomery. The County could choose to build projects that the State is not ready or able to fund. Ideally, the County would adopt a program that would help reduce traffic and help Montgomery grow.

Ironically, it might conceivably save money at the State level by reducing the need to construct another project elsewhere in the State in order to build the political support needed. Unlike the Montgomery-Prince George’s Purple Line and the Baltimore Red Line, Transit Authority projects would not need to move in tandem with other projects to gain support.

Disadvantages

No one likes seeing their taxes go up. While some would be willing to pay to see the money spent here in Montgomery on transportation, other will undoubtedly oppose anything that allows the County to increase its taxation authority.

Other may view the Transit Authority’s greatest strength–its ability to operate more insulated from politics–as its greatest weakness, perceiving it as less accountable to the public. Tradeoffs like these often exist in government. The Federal Reserve Board operates infinitely better for being independent of Congress and the President but it is also less responsive to the vicissitudes of public opinion.

County Executive and Council influence over transportation would simultaneously increase and decline. It would increase because they could fund and mandate new projects, giving the County much more muscular authority over transit. But the independent authority would be more independent once a funding mechanism is in place and a program adopted.

To Build What

A new Transit Authority would likely be able to move forward with the widely supported Corridor Cities Transitway (CCT) and additional bus-rapid transit lines gradually for the County. BRT is much less costly than light rail (Purple Line) or heavy rail (Metro).

It would almost certainly not be enough to move forward with the Purple Line because that project is just so expensive ($2.4 billion and rising). I am hearing that the Transit Authority would not be intended to build the Purple Line but to move forward with the CCT and other transit improvements.

Of course, I’d like to see numbers so I could figure out what is possible and what is not. This is impossible for the simple reason that the taxation rates and general program of any Transit Authority would be up to the County Council.

Preliminary Thoughts

My initial reaction is that the Transit Authority may well be a good idea. Montgomery County has major transportation needs that should be more broadly addressed. The Authority would provide both the means and the opportunity to do so. Councilmember Nancy Floreen, a former Council President, said that the idea had “a certain amount of sense” when I spoke with her.

People certainly should be interested and make their views known regarding the proposal. But I am concerned that the petition and emails circulating suggest large tax increases that simply are not realistically in the cards. This is a critical issue and we should use the bill as an opportunity to discuss our future–not dismiss it out of hand.

The proposed Transit Authority may well allow Montgomery to tackle its transportation needs much as similar tax increases in northern Virginia have aided road and transit construction south of the Potomac. No doubt people will want more information. The County Executive should tell us more about why he requested that this bill be filed. At the same time, there is a limit on what can be provided as the County has not begun to debate publicly if and how it would use its new power.

Opportunity Costs

The choice to spend vast sums of money on one project requires foregoing other choices. The tangled finances for the Purple and Red Lines (see also here) render it especially obvious. When the fares from Baltimore’s public transit system are needed as a backstop in case Purple Line fares are lower than hoped, the use of the Transportation Trust Fund (TTF) for non-Purple purposes is obviously going to be quite limited.

The plans to move ahead also with Baltimore’s Red Line should further assure that the TTF is tied up for literally decades. Indeed, the two projects have been closely tied together in order to build political support. It is hard to imagine moving ahead with one project without the other, as legislators in one metro area are unlikely to want to fund an incredibly expensive project in the other unless their constituents share in the benefits.

Existing Transit Needs

Montgomery and Prince George’s County already have an extensive public transit system. Both are integrated into WMATA’s Metro and Metrobus system. Each operates its own bus system: RideOn and TheBus. Both are also tied into the MARC system.

All parts of the system have suffered from cutbacks and need investment in infrastructure. Metro, the lungs of Washington’s transit system, remains in particularly dire need of money to maintain and to upgrade its infrastructure. Placing so many chips on the Purple Line will constrain the ability of the State to aid Metro–Montgomery and Prince George’s cannot expect to get all of Maryland’s transportation funding.

Less widely heralded in Montgomery in the face of perennial Metro problems–endless single tracking, escalators that don’t work, overly crowded trains at rush hour despite stagnating ridership–have been the cutbacks to MARC and Ride-On. Oddly, we reduced transit service designed to connect to the Purple Line even as we move forward with building it.

Purple Line supporters like to accuse opponents of being anti-transit–it’s a good simple communication meme that boils down a complex decision to good versus bad. Except that wanting to spend transportation dollars wisely and get the most for our tax dollars is pro-transit. Opposition to expanding bus service and continued negativity regarding an RTS that could serve the whole county sure doesn’t sound pro-transit.

The Bottom Line

We shouldn’t starve our existing transit system and forego future opportunities in order to build the Purple Line and the Red Line. Ironically, we could build cheaper RTS versions of both that would save the State billions–not chump change–and allow for additional transit and road improvements that would truly aid economic development and the ability of all Marylanders to reach jobs far more broadly. Now that’s smart growth.

Henry Kay, who heads transit project development for the state, said the MTA didn’t publicize the increase because it was considered a “minor adjustment” on such a large, complex project. He said the additional costs came from refined estimates based on more detailed engineering and still-rising real estate prices.

“It doesn’t reflect some faulty approach” to cost estimating, Kay said. “It’s just the nature of a mega-project being developed over a number of years.”

The excuse that cost estimates have risen because the earlier estimates were only rough estimates is suspicious if only because cost estimates have always increased. They never decline. If the estimates are unbiased, the errors shouldn’t be off only in one direction.

Put more bluntly, if MTA is being straight with us, why have the costs continually risen instead of sometimes going down instead of up? And these changes have occurred even as they have tended to take out expensive features, such as the promised continuation of the Capital Crescent Trail through the Purple Line tunnel.

It would be useful to hear the Montgomery and Prince George’s County Councils debate what project they would give up to pay for the latest increase in costs even as they figure out how to pay for their share of the project. The Montgomery County Council still has to figure out how to pay for the trail–whose costs have also doubled to $95 million.

The County Council also to convince the owner of the APEX building in Bethesda to tear down the building so the station can be built there–something the County is rightly working hard to accomplish (it’s the right place) but will also take money.

Will the next increase break $2.5 billion? One question we should’ve asked long ago: at what point does this project in the form of light rail become too expensive, especially since (1) the CCT has already been transmuted from the previously promised light rail into BRT; (2) Montgomery County is planning a countywide BRT system; (3) MTA’s own estimates showed BRT as much more cost effective; and (4) we have many pressing transportation needs, including other public transit investments and the maintenance of existing infrastructure (e.g. Metro and MARC) to make.

Maryland wants to create a public-private partnership (P3) to build and operate the Purple Line. Keolis North America, 70% owned by La Société Nationale des Chemins de fer Français (SNCF) is one of the finalists selected by the State.

Keolis’s proposal has run into trouble because of SNCF’s role in transporting Jews from France to Nazi death camps. Lea Lieberman who lost her father in the Holocaust gave moving testimony yesterday to the Senate Budget and Taxation Committee yesterday:

When the Nazis occupied Paris, my parents fled to Vichy France. Subsequently, the Gestapo arrested my father and left my mother to tend to a three year old child alone. . . .

Shortly after his arrest in Vichy France, he was taken to Drancy (the notorious holding camp in the outskirts of Paris) and subsequently shipped to Sobibor concentration camp via the French National Railroad, where he was murdered. . . .

Three days ago, a representative for SNCF, the French National Railroad, shirked any moral or legal responsibility by stating and I am paraphrasing, we were an occupied country, the trains were operated under Nazi command, there was nothing we could do except to obey our Nazi occupiers.

Ironically, this is similar to what the German soldiers stated in the Nuremburg trials after the War. Following orders is not a moral excuse to murder. I find that prototypical statement of helplessness to be even in and of itself. SNCF was complicit with the Nazi regime in the murder of innocent Jews, including my father. Indeed, it has been reported that the company has acknowledged guilt in France and paid out for than $6 billion in reparations, but only to French citizens and certain deportees.

Holocaust Survivor Leo Bretholz vociferously disputed SNCF’s rationale that it had no choice but to obey he occupiers in a commentary in the Baltimore Sun:

SNCF carried out its transports with precision, cruelty and deception. On each convoy, we were packed into 20 cattle cars, 50 people each. For the entire multi-day trip, we were given only one piece of triangular cheese, one stale piece of bread and no water. There was hardly room to stand or sit, and in the middle of the train was a single bucket to relieve ourselves. . . .

I even have a copy of an invoice SNCF sent the French government, seeking payment for the services it provided. They pursued payment on this after the liberation of Paris, after the Nazis were gone. They even charged interest for late payments. This was not coercion, this was business.

SNCF was not coerced into using cattle cars. It was not coerced into sending bills after the war. It was not coerced into serving no water on the trains. Had SNCF resisted, the number of those killed from France would have been greatly reduced. Had SNCF not imposed horrific conditions on its trains, many additional lives could have been saved.

Instead of taking responsibility for its actions during the past 70-plus years, the company has spent millions of dollars on a lobbying and public relations campaign to rewrite history and avoid accountability for its pivotal role in one of history’s greatest atrocities.

Regardless of one’s views on SNCF’s guilt, one need not wrestle with SNCF’s excuse of having to comply with the Nazi German occupiers for the simple reason that SNCF has already admitted guilt and paid reparations in France.

If that’s the case in France, it ought to be the case in Maryland. There is something deeply grotesque about a willingness to pay lobbyists to avoid accountability here when it has already admitted liability in its home country.

In response to SNCF’s refusal to pay reparations to American survivors of the Holocaust, Sen. Joan Carter Conway (D-43, Baltimore City) and Del. Kirill Reznick (D-39, Montgomery) have filed legislation to require SNCF to pay reparations if it wants to bid for the project.

The bill has been complicated by claims that any interference with the bidding process could derail federal funding. The Federal Transit Administration (FTA) sent a letter to the Maryland Transit Administration (MTA) stating that the bills “raise legal concerns regarding the ability of MTA to comply with federal full and open competition requirements” and thus “jeopardize federal funding” for the Purple and the Red Line.

MTA and the Maryland Department of Transportation (MDOT) have unsurprisingly lobbied hard against the bills. However, the letter from FTA was unusually artful and carefully couched to avoid any firm determination of the impact of the bills on federal funding.

Presumably, the State of Maryland could request a more definitive answer from FTA. Is the Obama Administration really not going to fund transportation projects because the State wants to use its leverage from this $6 billion contract–one of the largest it has ever awarded–to aid Holocaust victims?

The Jewish Community Relations Council (JCRC) has testified in favor of the bill. And some legislators have stated that they feel more strongly about the principle than the $900 million in funding recommended by FTA. As the Washington Post reported:

“We want the Purple Line, but is this the price we pay — to do business with these guys?” Sen. Roger Manno (D-Montgomery) said Thursday after a Budget and Taxation Committee hearing. “Maybe if that’s the case, maybe we can’t build it.”

The president’s proposal is a long way from a final budget–if Congress can even agree on a budget in this election year. But it is a step forward for the Purple Line, as federal funding is vital to the planned light-rail line. Proponents of the project are understandably pleased with this announcement.

The next day, however, the Maryland Transit Administration (MTA) revealed that Purple Line costs had risen yet again to $2.37 billion, as this graph from the Washington Post demonstrates:

the initial $1.2 billion estimate in 2001 probably was based on broad assumptions, such as the average cost per mile for rail construction nationally. As the state has refined the Purple Line design, he said, engineers have found more “challenges” that add costs. . . .

“The [cost estimate] number at that time [in 2001] would have been based on lines on a map,” Kay said.

About 30 percent of the project has been designed, he said, enough to form more precise cost projections.

The excuse that cost estimates have risen because the earlier estimates were only rough estimates is suspicious if only because cost estimates have always increased. They never decline. If the estimates are unbiased, the errors shouldn’t be off only in one direction.

The State also doesn’t mention that Maryland foots the entire bill for every increase. FTA has recommended $900 million in funding. That amount will not increase and may decline. So the amount that the State is on the hook for the project just increased from $1.34 billion to $1.47 billion–a 10% increase.

And that means $126 million less for all other transportation projects in the State of Maryland. It also means that Montgomery and Prince George’s Counties will receive less for other projects since more funds dedicated to this part of the State will have to go to pay for the Purple Line.